Uganda to close tax gaps amid scandal of tax evasion by officials

The Government of Uganda has accepted an offer by the People’s Republic of China to install latest technologies at various customs points as part of a diverse plan aimed at improving tax collections.

This however comes amid a scandal about revelations that one senior minister in the current NRM government has been running a trust in one of the countries considered a tax heaven or one where people hide money to avoid paying taxes in home countries.

A statement sent by the Ministry of Foreign Affairs indicates that a few days ago after the Minister of Foreign Affairs was indicated that Uganda’s Finance Minister Matia Kasaija signed a grant agreement worth (US$30m) with China’s Vice Minister for Commerce Dr. Qian Keming in the Chinese Capital Beijing on November 3, 2017.

The grant signing ceremony was witnessed by Dr. Chrispus Kiyonga, Uganda’s Ambassador to China, Dicksons Kateshumbwa, the Commissioner Customs (URA) and other senior government officials.

The statement noted that: “The grant will support the capacity of Uganda Revenue Authority (URA) to acquire latest technologies in the form of non-intrusive scanners, modernized customs risk management, supervision and communication systems, customs service and enforcement support, border infrastructure improvement among others.”

By introducing scanners, it is hopped that URA will be able to view large cargo such as containers without having to open them, a move that is believed will catch tax evaders.

The development could however attract scorn from members of the public following revelations that some top ranking ministers in Uganda hold billions of shillings in shadowy Trusts in countries with the reputation of hosting individuals and companies to avoid paying tax for their home countries.

In an international investigation known as Paradise Papers, Foreign Affairs Minister Sam Kuteesa was cited as one of the Ugandans who created a trust in Seychelles, with the assumed intent to evade tax. Kuteesa however denied the charge saying he directed the person to close the Trust known as Obuyonza Discretionary Trust, which was never done.

The fact that the government has maintained its silence by keeping the Minister in office, could be interpreted as a sign that it tolerates tax injustice.